CHALLENGE
Savills was instructed by Transport for London (TfL) to lead the process of selecting an Investment Partner to develop and hold a 3,000 unit Build to Rent (BtR) portfolio across London. TfL have ambitions to move from a capital receipt business model to driving long-term, secure revenue streams and see BtR as an opportunity to do so.
SOLUTION
The Operational Capital Markets team led the procurement process, working with other Savills teams including Corporate Finance, Commercial Development and Public Sector Land. Key services delivered included procurement and delivery strategy, deal structuring (Joint Venture), detailed market analysis and financial modelling and BtR consultancy and feasibility appraisals.
Prior to marketing the opportunity, we prepared a detailed BtR market report, analysed 16 sites to form the basis of the Seed Portfolio and then created a bespoke portfolio level financial model to look at the performance of the individual sites and return metrics on a portfolio basis.
We then undertook a soft market testing exercise which enabled us to identify the potential issues around timescale and structure that were then addressed prior to formal launch.
During a two stage marketing campaign, we received 13 Expressions of Interest at stage one and then carried out a detailed second round with three investors. This focussed on Site Specific Business Plans, JV Business Plan, Agreement for Lease, Heads of Terms and JV Heads of Terms.
RESULTS
Savills provided strategic advice to TfL on the creation of a Joint Venture, in the form of a new private commercial vehicle, which will generate revenues – allowing them to reinvest back into its transport network.
Following a three stage marketing and selection process, TfL chose Grainger as their Joint Venture Investment Partner and created Connected Living London, a newly formed JV to deliver bespoke BtR homes in London.
